SAB/Miller deal is said to be imminent.AP--Miller Brewing Co. will be sold to a foreign brewer in a S5 billion deal, creating the world's second-largest brewer, the Milwaukee Journal Sentinel The Milwaukee Journal Sentinel is a daily morning broadsheet printed in Milwaukee, Wisconsin, USA. It is the primary newspaper in Milwaukee, the largest newspaper in Wisconsin and is distributed widely throughout the state. reported last week.
The Journal Sentinel, citing unnamed beer industry sources, said London-based South African Breweries South African Breweries was founded in 1895 by Jacob Letterstedt specifically to serve a new market of miners and prospectors in and around Johannesburg. Two years later, it became the first industrial company to list on the Johannesburg Stock Exchange (JSE). PLC, the world's fourth-largest brewer, will acquire the Milwaukee-based Miller, the nation's second-largest brewer. The combined company would trail only Anheuser-Busch in size.
The announcement of a deal might come on Thursday, May 30th (after press-time for this issue) when SAB announces its fiscal year results.
Scott Bussen, a Miller spokesman, declined comment on the report when contacted by The Associated Press Associated Press: see news agency.
Associated Press (AP)
Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. .
Miller's current owner, Philip Morris Cos. Inc., and South African Breweries have acknowledged discussing a merger. The merger would leave Philip Morris with about a 30 percent stake in the new company.
Miller's corporate headquarters, with around 1,000 employees, is expected to remain in Milwaukee, sources told the Journal Sentinel. The newspaper also reported Miller's breweries, which employ 900 people, are expected to remain open.
Miller, founded in Milwaukee in 1855, has seven breweries in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. .
For South African Breweries, the deal creates a huge new U.S. customer base, breaking the company out of its traditional base in Africa.
Miller, with about $4.2 billion dollars in annual sales, would be South African Breweries' biggest move in a Western market. The company has expanded internationally with about a dozen purchases since 1999.
SAB had one previous brief foray into Verb 1. foray into - enter someone else's territory and take spoils; "The pirates raided the coastal villages regularly"
encroach upon, intrude on, obtrude upon, invade - to intrude upon, infringe, encroach on, violate; "This new colleague invades my the U.S. market in the 1980s (during apartheid) when it owned Latrobe Brewing Co. of Latrobe, PA, using a front company.
In addition to acquiring such well-known Miller brands as Lite, Genuine Draft and High Life, South African Breweries would gain access to Miller's large U.S. distribution system for its chief international brand, Pilsner Urquell
Pilsner Urquell (-German and international title, Plzeňský prazdroj .
British press reports said that the London-based SAB is hopeful of completing its cash and share deal with Miller Brewing's owner Philip Morris by the time it announces fiscal yearend results.
According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. the British press, the two sides are still working out the fine details of the deal expected to give Philip Morris a 33 percent stake of the combined brewing group with SAB paying the U.S. group around $2 billion in cash and a further $3 billion in equity.
According to analysts, the 60-40 equity-debt split of the deal is being structured due to SAB's inability to put up more cash, and partly so that Philip Morris can limited its tax liability on the deal.
SAB, which brews Castle and Pilsner Urquell beers, is expected to issue around 375 million shares to raise the $3 billion equity payment, and Philip Morris may agree a "lockup See hang and abend. " time period when it can not sell down its stake in the combined brewing operation, sources told Reuters.
Once the deal is clinched, SAB execs will try to assuage as·suage
tr.v. as·suaged, as·suag·ing, as·suag·es
1. To make (something burdensome or painful) less intense or severe: assuage her grief. See Synonyms at relieve.
2. market fears that SAB could fail to turn Miller around. SAB will fly to emphasize the efficiency benefits of the deal. However, there is little geographic overlap between the two brewers, so these benefits would be limited to some minor synergies, like using the Miller distribution system to market SAB's Pilsner Urquell in the U.S.
However, analysts are pleased that the deal will reduce SAB's reliance on earnings made in the weak South African rand “ZAR” redirects here. For the former republic, see South African Republic.
The rand is the currency of South Africa. It takes its name from the Witwatersrand (White-waters-ridge , while balancing steady earnings from Miller in the United States with the more unpredictable earnings from SAB operations in emerging markets.